Wealth distribution refers to the evaluation of wealth of different individuals or groups of individuals in the society. Individuals in this case refers to single entities, whether human or institutions. The groups of individuals refer to countries or groups of countries, for example a continent. It is distinct from income distribution in the sense that it considers the appropriation of assets properties among members of the society, and not their income only. Wealth distribution can be analyzed in different forms, for instance, equal percentages of the richest and poorest in the society can be compared. Several studies have established that the richest of the society have control to over half of the entire wealth. In several societies, initiatives such as taxation, property reallocation and regulation have been employed in a move to combat the imbalance in the world’s wealth distribution.
Currently, it is a common knowledge that in America, just like other countries of the world, the wealthiest, which only constitute one percentile, has a larger control on the political environment. They also are associated with more than fifty percent of the wealth. The major question today is, what is the wealth distributed in the global context? Where are the rich found and where do they live? What are the various wealth controlled by different countries? In addition, who are the supper high valued persons? Other studies have also established that the worlds wealthiest constitute only 0.5% and they control more than 35% of the global wealth.
A recent report by the Credit Suisse on the global wealth report summarized its findings in the following manner. The last report of the global total wealth was valued at $200 trillion. When sampled by region, the United States wealth values at about $50 trillion, which constitutes 25% of the world’s total wealth. Europe, when compared to America, owns a greater portion that is approximated at 32% compared to the 31% owned by America. North America has the highest fraction of the ultra rich according to geographic distribution.
The efforts of the FED to keep the stock markets high clearly illustrates that the asset composition in America is too large. They store the bulk of their wealth in financial assets. However, this is considered to involve a lot of risk, for example in the event of a deflation in the economy, the money value of these assets would be reduced to the extent of deflation. Developing countries, for instance Indonesia and India, much of their wealth, close to 80% or more of their total assets, is held in non-financial assets, majorly farms and housing. Europe also has an evident population who depict real poverty. This led to the housing privatization in the 1990s. In rich economies, financial assets constitute slightly more than 50% of the household wealth. This is exclusive of certain instances like France where recent vigorous rise in the house price have driven the share of non-financial assets to more than 60%.
In most economies of the world, pension funds and reserves of life assurance firms constitutes the largest share of the financial assets. This financial assets composition varies from different economies in relation to the importance of share and other equities though these equities do not always for a large composition of household financial assets. For example, they constitute 13% of the financial assets in the United Kingdom and 9% in Japan.
When considered in terms of gender, in 2005, females had 6% more than the men in terms of cash in the UK while this disparity was not much noticed in the US. The real assets were equitably distributed among these populations while the men in the UK had dominance in other financial assets. In both the US and UK, real assets were also equitably distributed, however, the males ha more debts than the females in both cases.
In 2011, a study revealed the wealth distribution per adult in the various regions of the world yielded the following results. North America, Western Europe and amongst the rich pacific of Asia and the countries in the middle east have wealth levels of more than USD 100,000 per adult. The leading countries include Norway, Switzerland, France and Singapore, each with wealth per adult valued above USD 250,000. Other major economies like Japan, USA, Canada and the United Kingdom have an average wealth per adult of USD 200,000.
Other economies are also categorized in to three major subdivisions. Emerging economies refer to the economies with average wealth per adult ranging from USD 25,000 to USD 100,000 and they include new EU entrants such as Hungary, Poland and Slovakia among others, and important Latin American economies together with some middle East countries. The second category constitutes economies with average wealth per adult falling between USD 5,000 to USD 25,000. This category s referred to as frontier wealth and includes the transition economies outside the EU, their neighbors to the Far East, most Latin American economies and countries on the Mediterranean coast of Africa and at the far most southern end of the continent. The last category refers to the economies with this average falling bellow USD 5,000 and includes most economies of South Asia and the rest part of Africa.
Davies, James B., et al. 2009. "The Global Pattern of Household Wealth." Journal Of International Development 21, no. 8: 1111-1124. EconLit with Full Text, EBSCOhost (accessed February 20, 2013).
Davies, James B., et al. 2011. "The Level and Distribution of Global Household Wealth." Economic Journal 121, no. 551: 223-254. EconLit with Full Text, EBSCOhost (accessed February 20, 2013).
Kendall, Diana. Sociology in Our Times: The Essentials. Stamford Connecticut: Cengage Learning. 2011.
O’Brien, Peter. Sovereign Wealth: The Role of State Capital in the New Financial Order. Singapore: World Scientific. 2011.